Buyer Receives 95 Percent Tax Break For Buying $100-Million NYC Condo

Illustration for article titled Buyer Receives 95 Percent Tax Break For Buying $100-Million NYC Condo

Buildings on 57th Street in New York City are breaking all kinds of records these days: for height, for how much they cost, and for the ridiculousness with which they showcase how messed up our housing system is.


A penthouse apartment at One57, one of the tallest residential buildings in the world (also famous for a dangling crane that could've killed a bunch of people), sold for $100,471,452.77 last month to a mystery buyer, setting the record for most expensive apartment ever sold in New York City.

The funny (see: enraging/depressing) part about that deal: its mystery owner will get a 95 percent tax break from the city, estimated to be worth $360,000 each year.


The tax break comes from the 421-a program, a law that was passed in 1971 to give developers tax incentives for up to 25 years if they built in New York City. The program was created at a time when New York City was not doing so well, and developers needed all the encouragement they could get to build in the city.


But that's definitely not the case anymore – construction loans were up 24 percent last year alone. The program still has some use – the city uses it to encourage developers to build affordable housing. But most of the tax breaks are going to luxury developments around the city, something that enrages affordable housing advocates.

"It's time for 421-a to go away," Maritza Silva-Farrell of the housing coalition Real Affordability for All, told the New York Times. "We are being forced to subsidize luxury developers who build apartments the vast majority of New York City residents cannot ever afford."


Progressive Mayor Bill De Blasio has suggested requiring that any development that receives the tax credit be required to have at least 20 percent affordable housing. But the city has little legal recourse for this kind of thing: New York State controls most of the city's housing laws, and the state legislature is notoriously corrupt and bankrolled by the real estate industry.

One57 is just one of the insanely huge buildings with insanely expensive apartments going up right now. There's also 111 West 57th, which will be the skinniest skyscraper in the world. The Nordstrom Tower, which will be nearly as tall as the new World Trade Center, and 432 Park, which will be the tallest residential tower in the Western hemisphere.


Many of the apartments aren't expected to be occupied. Instead, they'll just act as multi-million dollar investments for the global elite, who often buy the apartments under the names of shell corporations to avoid taxes in their home countries.


Welcome to America in 2015!

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